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Currently, FHA allows the seller to pay up to 6% in closing costs.  Yes, I have at least one conversation per day saying it is only 3%.  Guess what, it’s 6%, but that is getting ready to change.  FHA has proposed to lower it from 6% to 3% and is currently accepting public comment regarding this change.  What does this mean to you?  If a buyer has very little cash in the bank, this change may kill a few deals and it will definitely force homebuyers to save their money before applying for a mortgage.  The reason behind this change is FHA is cutting back on their risk.  The more money the borrower has in the deal, the more committed they will be.  As more information comes available, I will let you know.  If you are considering making an offer, now is the time to get approved and get the process started.

About the Author:  Chuck Walden (NMLS #148160) is a loan officer with Prospect Mortgage.  Email Chuck at chuck.walden@prospectmtg.com or call 678-725-8076.  Bonus: Click to get a free, no obligation preapproval. I love to work with my readers!

 

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